A Biography of Alexander Hamilton (1755-1804)

The Foreign Policy of Finance

Hamilton had never made a secret of the fact that he admired the government and fiscal
policies of Great Britain. Indeed, his own fiscal plan--a funded debt and national
bank--were
textbook English policies with Hamiltonian modifications to suit the special
circumstances of
the United States. The fact that there had been an acrimonious break and a lengthy war
with
Great Britain left no residue of animosity with Hamilton. To him it was a simple matter
of
fact that Great Britain was the most politically and economically stable kingdom on the
globe, and that it would be eminently prudent to pursue good relations with her. Just
as
important to Hamilton in the forging of a strong relationship were the cultural
similarities
between the two countries: "We think in English," he told George Beckwith, the
unofficial
British envoy, "and have a similarity of prejudices, and of predilections."

James Madison did, however, reserve special animosity toward Great Britain. To him,
England represented all that was corrupt in the world--the greed of a mercantile
economy,
the prejudice of a one-church state, the threat of a monarchical government. During the
first
session of congress in 1789, Madison had advocated a discriminatory tonnage duty against
countries lacking commercial treaties with the United States, which was primarily aimed
at
Britain in retaliation for Britain's restrictions on American commerce in the West
Indies, and
her refusal to relinquish western posts. The tariff achieved some of Madison's wider
objectives as well, including limiting the number of credit purchases of luxuries from
Britain, which made Americans the more beholden to their former mother country. Madison
favored instead a stronger alliance with Britain's antagonist, France, and Secretary of
State
Jefferson felt much the same way about foreign relations.

In Hamilton's view, a Franco-American alliance at the expense of relations with Britain
would be a disaster to his economic plan. Hamilton would have agreed with Madison that,
since Americans were the leading consumers of British goods, impaired commerce between
Britain and the United States would be more harmful to the former--he had used that
argument when supporting the measures of the Continental Congress in 1774. On the other
hand, Hamilton saw that Madison's strategy would do great harm to his short-term goals
by
reducing revenues from the impost and excise taxes upon which his system depended.

Fearing the consequences of a trade war with Britain, Hamilton communicated to Beckwith,
in a series of meetings, his wish to see improved relations and a commercial treaty
between
the United States and Britain.

The propriety of Hamilton's meetings with Beckwith, and later with official British
minister,
George Hammond, has been a matter of intense debate among historians. The conferences
took place covertly, and without the knowledge of the Secretary of State (although the
early
Hamilton/Beckwith meetings occurred before Jefferson accepted his appointment); however,
the talks themselves were never understood by either party as official or binding, and
besides, Hamilton was culling information from the British agents for Washington on the
latter's request. Hamilton's efforts to secure an alliance with Great Britain were
suppressed
by Washington in 1792, and relations between the two countries continued to sour.
Hamilton
continued to advocate better relations, and eventually achieved his aim with the
controversial
Jay Treaty of 1795.